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TOPIC: How to value a theater for sale?

How to value a theater for sale? 12 Nov 2007 16:08 #16486

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I have been asked to underwrite, or price, a working movie theater in my area. It includes the business, the building, and all the real estate. I have sold businesses before, so I am aware that there are usually some industry-specific factors that help determine price. Can you share any insight on how you evaluate the value of cash-flowing movie theater?
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Re: How to value a theater for sale? 12 Nov 2007 17:35 #16487

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Theatres are often sold as multiples of the EBITDA- usually anywhere between 4-8x. Market conditions will dictate the difference.
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Re: How to value a theater for sale? 12 Nov 2007 18:19 #16488

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Thank you.

Another question I have has to do with expenses. There are a lot of posts that here that outline percentages of overall income from various sources (concessions, tickets, advertising, etc.). But what are the typical expenses associated with owning a theater (not inclucing rent/mortgage payments)?
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Re: How to value a theater for sale? 12 Nov 2007 18:21 #16489

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1 st is how old and how many screens ...newer theaters will fare much better than old ...
Often old theaters dont even get the realestate true value do to the fact they are a theater and very hard to change to a new use!

I have been all over the country and looked at over 15 theaters to purchase in the last 5 years./
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Re: How to value a theater for sale? 12 Nov 2007 18:54 #16490

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This is a multi-screen theater that is open and cash-flowing in a major market. It is an independent. If you are still on the market to buy, I would be grateful for your input at to what you look for when you buy.
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Re: How to value a theater for sale? 12 Nov 2007 19:06 #16491

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Slap is right, old theaters are often mistakingly valued at the same price as other commercial real estate nearby, but they will sit on the market for years because nobody is going to pay that much for an old theater to be used as a theater. Older single screens are a dime a dozen. Many are bulldozed because they are worth only as much as the real estate they sit on since they are extremely difficult to convert to any other use... unfortunately.

If the theater is showing a loss each year, there isn't much value in the business itself in my opinion. The equipment MAY have a little value.

Many theater sellers value their theaters MUCH higher than they will sell for due to their own personal feelings of trying to get back blood, sweat, and tears, so they just don't sell at all and go under. It's extremely rare to sell an old theater to the right individual to be run as a theater- it has to come with a very low pricetag.
"In a place like this, the magic is all around you. The trick is to see it." -Martin Landau
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Re: How to value a theater for sale? 12 Nov 2007 19:17 #16492

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I have since bought a theater but would go for # 2 ...Can you say what state it is in?
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Re: How to value a theater for sale? 12 Nov 2007 19:18 #16493

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YGM
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Re: How to value a theater for sale? 13 Nov 2007 10:47 #16494

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YGM???
"In a place like this, the magic is all around you. The trick is to see it." -Martin Landau
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Re: How to value a theater for sale? 13 Nov 2007 11:32 #16495

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You've Got Mail
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